The Judgment of the Court was delivered by
Sen Gupta, J.:— This appeal is at the instance of the plaintiff who has challenged the judgment and decree passed by Sri P. Chatterjee, Addl. District Judge, 5th Court at Alipore in Title Appeal No. 1411 of 1967 reversing the decision of Shri L.K Pal, Subordinate Judge, 9th Court at Alipore in Title Suit No. 78 of 1965.
2. The plaintiff brought the suit in the Subordinate Judge's Court on the allegation that he purchased the suit property from defendant No. 1 by a registered kobala dated 18-11-55; on the same day defendant No. 1 executed a registered kabuliyat in favour of him and the defendant No. 1 became a tenant under the plaintiff at a monthly rental of Rs. 40-8-0 in respect of the suit premises. The plaintiff filed Title Suit No. 357 of 1956 in the 2nd Court of Munsif at Baraset for ejectment of defendant No. 1 from the suit premises and for mesne profits. Defendant No. 1 contested the said suit and for the first time disclosed that he executed a registered deed of agreement on February 24, 1953 in favour of defendant No. 2 wherein it was stated that defendant No. 2 agreed to purchase the suit property at a sum of Rs. 4001 out of which the earnest money already paid was Rs. 3001. On coming to know about the said fact the plaintiff impleaded defendant No. 2 as a party in that suit. The said defendant No. 2 asserted that on the strength of the deed of agreement dated 24-2-53 he filed Title Suit No. 13 of 1956 in the 9th Court of Subordinate Judge at Alipore for specific performance of contract against defendant No. 1. That suit was decreed on 10th April, 1956. Defendant No. 2 got possession in the suit premises on 16th December, 1956 in Title Execution Case No. 8 of 1956.
3. The plaintiff got the decree for mesne profits against defendant No. 1 in Title Suit No. 357 of 1956 but his prayer for khas possession of the premises in suit was refused. In the second appeal against the judgment and decree passed in Title Suit No. 357 of 1956 all questions involved as between the plaintiff and defendant No. 2 in respect of the suit properties were left open.
4. The plaintiff next filed Title Suit No. 78 of 1965 for evicting the defendants from the suit premises and for getting khas possession as well as mesne profits from them. Defendant No. 2 Bhagirathi Gore contested the claim of the plaintiff in this suit. According to him, the plaintiff was the purchaser of the suit property with notice of his agreement with defendant No. 1 for the purchase of the suit premises at a sum of Rs. 4001 dated 24th April, 1953; the plaintiff thus could not be said to be a bona fide purchaser for value without notice; he further contended that the sale in favour of the plaintiff by defendant No. 1 was a collusive one which was created only to defeat and delay his claim in respect of the property in question. Other contentions which were raised in the said suit are not relevant for the purpose of consideration in this appeal. The contentions of defendant No. 2 were not accepted by the trial court who decreed the suit in favour of the plaintiff. Against the said decision defendant No. 2 preferred Title Appeal No. 1411 of 1967. The court of appeal below allowed the said appeal and dismissed the suit. Against the said judgment and decree this second appeal has been preferred by the plaintiff.
5. It will be convenient to refer to the parties in their original characters of plaintiff and defendants, bearing in mind that the plaintiff is now the appellant and the defendants Nos. 1 and 2 are now respondents Nos. 2 and 1 respectively.
6. Mr. Bhabesh Chandra Mitra, learned Advocate for the plaintiff-appellant has challenged the said finding of the court of appeal below on the ground that on the materials on record the said finding was not justified and also bad in law. Mr. Mitra went so far as to argue that even if all the averments of defendant No. 2 as made in his written statement be accepted still then as the plaintiff was not made a party in Title Suit No. 13 of 1956 of the 9th Court of Subordinate Judge for specific performance of contract brought by defendant No. 2, he cannot resist the claim of the plaintiff in the suit; whether the plaintiff was a bona fide purchaser for value with notice or not is immaterial in this case as he was not made a party in Title Suit No. 13 of 1956. According to Mr. Mitra, this is a claim or this is a competition for establishing the right of the respective parties on the basis of two title deeds - one dated 18-11-55 and another dated 24th September, 1956; the plaintiff's kobala being earlier in time would prevail as, according to the plaintiff, the deed of agreement even assuming to be a bona fide one did not create any charge on the property in question.
7. Mr. Acharya, learned Advocate for Bhagirathi Gore defendant No. 2 (respondent No. 1), on the other hand, contends that since the purchase of the property by Bhagirathi he has been possessing the same; that he being the purchaser of the suit property on the basis of the prior deed of agreement, Ext. M dated 24-2-53, his title will relate back from that date; in any case he has acquired an equitable right on the basis of that agreement to avoid the plaintiff's sale deed dated 18-11-55 by which he purchased the suit property. Before we enter into the discussion of the respective points raised in this case, we like to state certain admitted facts to show how defendant No. 1 dealt with the property. He first sold the same to one Mangilal.
8. Sitaram brought the Title Suit No 87 of 1953 against the heirs of Mangilal for specific performance of contract on 25-2-53 and got the decree on 11-5-54. He got the sale deed in his favour on 15-3-55 in Title Execution Case No. 76 of 1954. His possession in the same continued throughout as he was holding the property under Mangilal as a monthly tenant in terms of a separate deed executed on 9-3-49, the same date when Sitaram sold the property to him, and got another deed for reconveyance.
9. Just one day before the institution of the Title Suit No. 87 of 1953, that is on 24-2-53, the defendant No. 1 agreed to sell that property to defendant No. 2 his brother-in-law and executed a registered deed of agreement in favour of defendant No. 2.
10. That deed of agreement was followed by a suit for specific performance of a contract brought by defendant No. 2 against defendant No. 1 Sitaram. That suit was registered as Title Suit No. 13 of 1956 in the Court of 9th Subordinate Judge at Alipore, on 11-2-56. That suit was decreed on 10-4-56. He got the sale deed in his favour through court on 24-9-56 in Title Execution Case No. 8 of 1956.
11. Another pertinent fact need be stated here: Sometime before the Title Suit No. 13 of 1956 was Sled Sitaram (defendant No. 1) again sold the property to one Kanai Shaw on 23-6-55, who again resold the same to Sitaram on 18-11-55, the day, when plaintiff purchased the same from Sitaram.
12. The following facts, therefore, emerge for our consideration: That in the Title Suit No. 13 of 1956 brought by defendant No. 2, against defendant No. 1, the plaintiff was not a party, that the plaintiffs sale deed by which he purchased the property is prior in time, as it was executed on 18-11-55, whereas defendant No. 2's sale deed was executed on 24-9-56. The point for our consideration is, in a competition between these two kobalas which will prevail.
13. There is no dispute that the deed executed earlier will prevail over the one executed subsequently.
14. Mr. Acharya, learned Advocate for the defendant No. 2 submits that as the contract for sale of the property in question was entered into on 24-2-53 the sale deed in favour of defendant No. 2 by defendant No. 1 will relate back from the date of the agreement. This contention is sought to be established by the decision in the case of Johur Mull Bhurtra v. Jatindra Nath Bose, reported in 34 Cal LJ 79 : (AIR 1922 Cal 412 (2)). Their Lordships held:
“When a suit for specific performance of a contract for transfer of immovable property is ended by a final decree transferring the title, that title relates back to the date of the agreement on which suit is based, and the court will not permit its decree to be rendered nugatory by intermediate conveyances. Such a suit operates as lis pendens.”
15. That decision is based on the principle of lis pendens as the transfer took place during the pendency of the suit for specific performance of contract. In the instant case the sale in favour of the plaintiff took place long before the suit for specific performance of contract was instituted by defendant No. 2 against defendant No. 1. Moreover in that Title Suit No. 13 of 1956, the plaintiff was not made a party. For that reason, the decree passed in that suit cannot be binding on the plaintiff, and in consequence whereof the decision referred to by the respondent cannot apply in the facts of this case.
16. Our attention has been drawn to the decree passed in Title Suit No. 13 of 1956, wherein defendant No. 2 is the decree-holder. The effect of such a decree for specific performance of contract requires our consideration. In our view a decree for specific performance passed on the basis of a contract for sale of immovable property does not create any interest in the property in favour of the decree-holder. It only super-adds the sanction of the court to enforce it through the medium of court. As such the decree-holder can enforce the said contract and get it enforced through court, subject to whatever interest the judgment-debtor had at the time of execution.
17. Let us now turn to the relevant provision of Section 54 of the Transfer of Property Act. Reference may be made to the following part of that section. It is as follows:—
“A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.”
18. The above provision clearly lays down that the contract for sale does not create any interest in the property in favour of the person contracting to purchase the same. In this view of the matter the agreement dated 24-2-53 (Ext. M) by itself is of little assistance to defendant No. 2.
19. To obviate that difficulty, Mr. Acharya has drawn our attention to Section 91 of the Indian Trusts Act, 1882. To understand, the implication of the submissions of Mr. Acharya in this regard, we quote that section here:—
“Where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract.”
20. The words “to the extent necessary to give effect to the contract” are very significant. It means a particular right which the contracting party had, to enforce the said contract, namely a suit for specific performance. The plaintiff held that property subject to the said equity. The defendant No. 2, on other condition being satisfied could have enforced his contract against this plaintiff provided he was impleaded a party in his suit for specific performance. The only mode to enforce that trust was by means of that suit. The defendant No. 2 having failed to avail of that opportunity cannot resist the claim of the plaintiff, who has acquired a better title in the property, his purchase being prior in time.
21. Mr. Acharya next contends that the plaintiff having purchased the property with notice, of the prior contract, cannot get a decree for khas possession of the suit premises and that such a plea can be taken as a defence to defeat the claim of the plaintiff who is a purchaser with the notice of the prior agreement for sale. This submission resolves into two parts, namely whether such a plea can be taken by way of defence and secondly whether the plaintiff can be said to have purchased the property with notice.
22. We have already referred to the provisions of Section 91 of the Indian Trusts Act, 1882. The said provision creates an equitable right to be enforced in a suit for specific performance.
23. Last clause of Section 54 of the Transfer of Property Act clearly indicates that by such a contract for sale, no interest is created. In this respect it differs from the English law which recognises that a contract for sale recognises an equitable estate to the purchaser. A person can protect himself in a suit by taking some defence, if otherwise available under Section 53-A of the Transfer of Property Act, but apart from that such a plea by way of defence cannot be taken. Such a question was raised in the case of Khan Bahadur Mian Pir Bux v. Sardar Mahomed Tahar reported in 60 Cal LJ 370 : (AIR 1934 PC 235) wherein it has been held by their Lordships of the Judicial Committee that apart from Section 53-A an averment of possession following upon the contract, is not a relevant defence to an action for ejectment in India. We shall presently discuss whether the provision of Section 53-A of the Transfer of Property Act, is available to the defendant No. 2, on the facts and materials on record. Such a plea is not available to the defendant No. 2, as the same was not raised in the trial court. The said point being a mixed question of law and fact cannot be allowed to be raised for the first time in the second appeal by the respondent to support the judgment on this plea which was never raised at the earlier stages.
24. The principles of part performance has been incorporated in Section 53-A of the Transfer of Property Act. When an instrument is defective and not completed in the manner as prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee any right in respect of the property of which the transferee has taken or continued in possession. In the instant case, the defendant No. 2 actually got a sale deed in his favour through court. Accordingly, his possession, even if any, can now be traced on the basis of a valid deed. The deed of agreement, Ext. M, even if not a collusive one, did not create any title in him in the property proposed to be purchased. As such in the competition between two title deeds - one in favour of plaintiff and another in favour of defendant No. 2, the former one being prior in time will prevail.
25. Let us now consider whether the plaintiff can at all be said to be a purchaser with the notice of prior contract. It is not the case of the defence that the fact of prior contract was actually brought home directly to the plaintiff, rather his case is that the plaintiff, from the circumstance and materials on record, should be presumed to have constructive notice of the existence of the prior contract. Mr. Acharya wants to establish his case that the plaintiff had constructive notice of the prior contract on two grounds, namely, that registration of such a deed was a sufficient notice to those persons intending to deal with such property and secondly that the defendant No. 2 was in actual possession of the same at the time when plaintiff purchased it. While dealing with the first point, it is seen that the explanation to Section 17(2) has been added by Section 2 of the Indian Registration (Amendment) Act, 1927. The said explanation clearly provides that such a document requires no registration. In that view of the matter registration of such a document will not raise a constructive notice against the purchaser of such a property, as under the law he was not bound to search the registration office, to find out whether the property proposed to be purchased was the subject-matter of a contract and whether the same was registered.
26. Let us now turn to the other branch of submission of Mr. Acharya. It has been submitted that the defendant No. 2 was in possession of the property in suit, that fact, according to Mr. Acharya, was sufficient to raise a presumption of constructive notice. In this connection we may note that the lower appellate court failed to note that defendant No. 2 being a brother-in-law of defendant No. 1, had been living jointly with him in the same premises, at the relevant time. That is a circumstance which may be considered in favour of the plaintiff and as such no inference as to the constructive notice can be drawn against the plaintiff, on that score. We are, therefore, of the view that the plaintiff cannot be said to have purchased the property with notice of the prior contract.
27. It has strenuously been argued on behalf of the defendant No. 2 that the plaintiff cannot be said to toe a bona fide purchaser. The court of appeal below has levelled a charge against the plaintiff, as being a hasty purchaser. He took strong exception against the conduct of the plaintiff for having purchased the, property without searching the registration office, and having purchased the same at a sum of Rs. 2,700 when in fact, defendant No. 1 got back the property from the heirs of Mangilal at a sum of Rs. 3,000.
28. We cannot support the said observation of the lower appellate court, firstly the plaintiff got all the information relating to the property in suit from defendant No. 1 who handed over title deeds of this property showing his re-purchase from the heirs of Mangilal and the chalan by which he deposited money in the court while getting back the said property in the suit for specific performance against the heirs of Mangilal. Moreover, defendant No. 1 on 18-11-55 perfected his title in the suit property by re-purchasing the same from Kanai Shaw and the plaintiff on that very day purchased the same from defendant No. 1. These facts might be sufficient for plaintiff for not taking steps to search the sub-registry office.
29. The contention of defendant No. 2 that the plaintiff purchased the property at a reduced rate and from it an adverse inference is to be drawn also does not stand to reason as the plaintiff purchased at a consideration of Rs. 2,700 (two thousand seven hundred) at a price more than Kanai received from defendant No. 1 while selling the same to him. Moreover, price depends upon various factors. Merely showing the difference in price between the two sale deeds relating to the same property, executed at different times, it cannot be said that the subsequent purchase at a reduced price must be collusive and as such it cannot be said to be a bona fide one. On the contrary, the mala fide purchaser generally inflates the price. In this case, however, we do not find any want of bona fides in the conduct of the plaintiff in his purchase of this property. In consequence whereof the said contention of Mr. Acharya also fails.
30. Mr. Mitra contends that the deed of agreement entered into between defendant No. 1 and defendant No. 2 was nothing but a collusive document intended to be used, if and when occasion arose; the defendant No. 1 has set up defendant No. 2 after receiving the consideration money, to defeat his claim and to make an illegal gain out of the same. The conduct of defendant No. 1 for transferring the property successively to different persons, may raise such an inference, but we do not think it necessary, to make a finding on that point, for coming to a decision in this case.
31. For the reasons stated we cannot agree with the findings of the court of appeal below on this point.
32. Mr. Acharya has drawn our attention to the decree passed by the trial court ad regards mesne profits. The trial court passed a decree for mesne profits of Rs. 50 tentatively as claimed by the plaintiff. He also directed that the plaintiff would be entitled to apply for a final decree for further mesne profits from the defendant No. 2 at the rate of Rs. 50 per month from 16-12-56 till delivery of possession less the amount of Rs. 50 on payment of additional court-fees. Mr. Acharya submits that the mesne profits at the rate of Rs. 50 cannot be justified inasmuch as there is no evidence in support of the said claim. Mr. Mitra, learned Advocate for the plaintiff also agrees with the said contention of Mr. Acharya and he also submitted that the mesne profits at the rate of Rs. 40.50 per month may be granted. The suit was filed on 29-7-65. The claim for mesne profits for the past period cannot exceed three years from the date of institution of the suit, i.e from 29-7-65. The decree as passed by the trial court in excess of that period cannot be supported and the amount of mesne profits which was fixed at the rate of Rs. 50 per month should also be reduced to Rs. 40.50 per month. In respect of other findings and orders passed by the trial court they are acceptable to us.
33. In the result, the appeal is partly allowed. The prayer for khas possession on evicting the defendant No. 2 from the premises in question as decreed by the trial court is confirmed. The decree passed by the trial court in respect of mesne profits will cover the period of three years prior to the date of institution of the suit, i.e 29-7-65 till the plaintiff gets possession in the same and the mesne profits be assessed at the rate of Rs. 40.50 per month and the same be calculated for the period indicated above. The tentative mesne profits fixed at Rs. 50 by the trial court be reduced to Rs. 40.50 The plaintiff will get decree for mesne profits for additional amount on payment of court-fees and prayer being made in accordance with law. The trial court's decree will be modified to that extent.
34. On the facts and circumstances of the case we, however, do not pass any decree for costs in this court. The plaintiff will, however, get proportionate costs of both the courts below.
35. M.N Roy, J.:— I agree.
36. Appeal partly allowed.